1、Designation: E1369 11E1369 15Standard Guide forSelecting Techniques for Treating Uncertainty and Risk inthe Economic Evaluation of Buildings and BuildingSystems1This standard is issued under the fixed designation E1369; the number immediately following the designation indicates the year oforiginal a
2、doption or, in the case of revision, the year of last revision. A number in parentheses indicates the year of last reapproval. Asuperscript epsilon () indicates an editorial change since the last revision or reapproval.1. Scope1.1 This guide covers techniques for treating uncertainty in input values
3、 to an economic analysis of a building investmentproject. It also recommends techniques for evaluating the risk that a project will have a less favorable economic outcome than whatis desired or expected.21.2 The techniques include breakeven analysis, sensitivity analysis, risk-adjusted discounting,
4、the mean-variance criterion andcoefficient of variation, decision analysis, simulation, and stochastic dominance.1.3 The techniques can be used with economic methods that measure economic performance, such as life-cycle cost analysis,net benefits, the benefit-to-cost ratio, internal rate of return,
5、and payback.2. Referenced Documents2.1 ASTM Standards:3E631 Terminology of Building ConstructionsE833 Terminology of Building EconomicsE917 Practice for Measuring Life-Cycle Costs of Buildings and Building SystemsE964 Practice for Measuring Benefit-to-Cost and Savings-to-Investment Ratios for Buildi
6、ngs and Building SystemsE1057 Practice for Measuring Internal Rate of Return and Adjusted Internal Rate of Return for Investments in Buildings andBuilding SystemsE1074 Practice for Measuring Net Benefits and Net Savings for Investments in Buildings and Building SystemsE1121 Practice for Measuring Pa
7、yback for Investments in Buildings and Building SystemsE1185 Guide for Selecting Economic Methods for Evaluating Investments in Buildings and Building SystemsE1946 Practice for Measuring Cost Risk of Buildings and Building Systems and Other Constructed ProjectsE2204 Guide for Summarizing the Economi
8、c Impacts of Building-Related Projects2.2 Adjuncts:Discount Factor Tables Adjunct to Practices E917, E964, E1057, E1074, and E112143. Terminology3.1 DefinitionsFor definitions of terms general terms related to building construction used in this guide, refer toTerminologiesTerminology E631 and ; and
9、for general terms related to building economics, refer to Terminology E833.4. Summary of Guide4.1 This guide identifies relatedASTM standards and adjuncts. It describes circumstances when measuring uncertainty and riskmay be helpful in economic evaluations of building investments. This guide defines
10、 uncertainty, risk exposure, and risk attitude.1 This guide is under the jurisdiction of ASTM Committee E06 on Performance of Buildings and is the direct responsibility of Subcommittee E06.81 on BuildingEconomics.Current edition approved Nov. 1, 2011Oct. 1, 2015. Published December 2011October 2015.
11、 Originally approved in 1990. Last previous edition approved in 20072011as E1369 07E1369 11.2. DOI: 10.1520/E1369-11.10.1520/E1369-15.2 For an extensive overview of techniques for treating risk and uncertainty, see Marshall, H.E., Techniques for Treating Uncertainty and Risk in the Economic Evaluati
12、onof Building Investments, National Institute of Standards and Technology, Special Publication 757, 1988.3 For referencedASTM standards, visit theASTM website, www.astm.org, or contactASTM Customer Service at serviceastm.org. For Annual Book of ASTM Standardsvolume information, refer to the standard
13、s Document Summary page on the ASTM website.4 Available from ASTM International Headquarters. Order Adjunct No. ADJE091703. Original adjunct produced in 1984.This document is not an ASTM standard and is intended only to provide the user of an ASTM standard an indication of what changes have been mad
14、e to the previous version. Becauseit may not be technically possible to adequately depict all changes accurately, ASTM recommends that users consult prior editions as appropriate. In all cases only the current versionof the standard as published by ASTM is to be considered the official document.Copy
15、right ASTM International, 100 Barr Harbor Drive, PO Box C700, West Conshohocken, PA 19428-2959. United States1It presents nonprobabilistic and probabilistic techniques for measuring uncertainty and risk exposure. This guide describes brieflyeach technique, gives the formula for calculating a measure
16、 where appropriate, illustrates the techniques with a case example, andsummarizes its advantages and disadvantages.4.2 Since there is no best technique for measuring uncertainty and risk in every economic evaluation, this guide concludes witha discussion of how to select the appropriate technique fo
17、r a particular problem.4.3 This guide describes in detail how risk exposure can be measured by probability functions and distribution functions (seeAnnex A1). It also describes how risk attitude can be incorporated using utility theory and other approaches (see Annex A2).5. Significance and Use5.1 I
18、nvestments in long-lived projects such as buildings are characterized by uncertainties regarding project life, operation andmaintenance costs, revenues, and other factors that affect project economics. Since future values of these variable factors aregenerally not known, it is difficult to make reli
19、able economic evaluations.5.2 The traditional approach to project investment analysis has been to apply economic methods of project evaluation tobest-guess estimates of project input variables as if they were certain estimates and then to present results in single-value,deterministic terms. When pro
20、jects are evaluated without regard to uncertainty of inputs to the analysis, decision makers may haveinsufficient information to measure and evaluate the risk of investing in a project having a different outcome from what is expected.5.3 Risk analysis is the body of theory and practice that has evol
21、ved to help decision makers assess their risk exposures andrisk attitudes so that the investment that is the best bet for them can be selected.NOTE 1The decision maker is the individual or group of individuals responsible for the investment decision. For example, the decision maker maybe the chief e
22、xecutive officer or the board of directors.5.4 Uncertainty and risk are defined as follows. Uncertainty (or certainty) refers to a state of knowledge about the variable inputsto an economic analysis. If the decision maker is unsure of input values, there is uncertainty. If the decision maker is sure
23、, thereis certainty. Risk refers either to risk exposure or risk attitude.5.4.1 Risk exposure is the probability of investing in a project that will have a less favorable economic outcome than what isdesired (the target) or is expected.5.4.2 Risk attitude, also called risk preference, is the willing
24、ness of a decision maker to take a chance or gamble on aninvestment of uncertain outcome. The implications of decision makers having different risk attitudes is that a given investment ofknown risk exposure might be economically acceptable to an investor who is not particularly risk averse, but tota
25、lly unacceptableto another investor who is very risk averse.NOTE 2For completeness, this guide covers both risk averse and risk taking attitudes. Most investors, however, are likely to be risk averse. Theprinciples described herein apply both to the typical case where investors have different degree
26、s of risk aversion and to the atypical case where someinvestors are risk taking while others are risk averse.5.5 No single technique can be labeled the best technique in every situation for treating uncertainty, risk, or both. What is bestdepends on the following: availability of data, availability
27、of resources (time, money, expertise), computational aids (for example,computer services), user understanding, ability to measure risk exposure and risk attitude, risk attitude of decision makers, levelof risk exposure of the project, and size of the investment relative to the institutions portfolio
28、.6. Procedures6.1 The recommended steps for carrying out an evaluation of uncertainty or risk are as follows:6.1.1 Determine appropriate economic measure(s) for evaluating the investment (see Guide E1185).6.1.2 Identify objectives, alternatives, and constraints (see Practices E917, E964, E1057, E107
29、4, and E1121).6.1.3 Decide whether an uncertainty and risk evaluation is needed, and, if so, choose the appropriate technique (see Sections5, 7, 8, and 10).6.1.4 Compile data and establish assumptions for the evaluation.6.1.5 Determine risk attitude of the decision maker (see Section 7 and Annex A2)
30、.6.1.6 Compute measures of worth5 and associated risk (see Sections 7 and 8).6.1.7 Analyze results and make a decision (see Section 9).6.1.8 Document the evaluation (see Section 11).5 The NIST Building Life-Cycle Cost (BLCC) Computer Program helps users calculate measures of worth for buildings and
31、building components that are consistent withASTM standards. The program is downloadable from http:/www.eere.energy.gov/femp/information/download_blcc.html. http:/energy.gov/eere/femp/building-life-cycle-cost-programs.E1369 1527. Techniques: Advantages and Disadvantages7.1 This guide considers in det
32、ail three nonprobabilistic techniques (breakeven analysis, sensitivity analysis, and risk-adjusteddiscounting) and four probabilistic techniques (mean-variance criterion and coefficient of variation, decision analysis, simulation,and stochastic dominance) for treating uncertainty and risk. This guid
33、e also summarizes several additional techniques that are usedless frequently.7.2 Breakeven Analysis:7.2.1 When an uncertain variable is critical to the economic success of a project, decision makers frequently want to know theminimum or maximum value that variable can reach and still have a breakeve
34、n project; that is, a project where benefits (savings)equal costs. For example, the breakeven value of an input cost variable is the maximum amount one can afford to pay for the inputand still break even compared to benefits earned.Abreakeven value of an input benefit variable is the minimum amount
35、the projectcan produce in that benefit category and still cover the projected costs of the project.NOTE 3Benefits and costs are treated throughout this guide on a discounted cash-flow basis, taking into account taxes where appropriate. (See PracticeE917 for an explanation of discounted cash flows co
36、nsidering taxes.)7.2.2 To perform a breakeven analysis, an equation is constructed wherein the benefits are set equal to the costs for a giveninvestment project, the values of all inputs except the breakeven variable are specified, and the breakeven variable is solvedalgebraically.7.2.3 Suppose a de
37、cision maker is deciding whether or not to invest in a piece of energy conserving equipment for agovernment-owned building. The deviation of the formula for computing breakeven investment costs for the equipment is asfollows:S 5C (1)C 5I1O or a combination might include optimistic values for some va
38、riables in conjunction withpessimistic or expected values for others. Examining different combinations is required if the uncertain variables are interrelated.7.3.3 The following illustration of sensitivity analysis treats an accept/reject decision. Consider a decision on whether or not toinstall a
39、programmable time clock to control heating, ventilating, and air conditioning (HVAC) equipment in a building. The timeclock reduces electricity consumption by turning off that part of the HVAC equipment that is not needed during hours when thebuilding is unoccupied. Using the benefit-to-cost ratio (
40、BCR) as the economic method, the time clock is acceptable on economicgrounds if its BCR is greater than 1.0. The energy reduction benefits from the time clock, however, are uncertain. They are afunction of three factors: the initial price of energy, the rate of change in energy prices over the life
41、cycle of the time clock, andthe number of kilowatt hours saved. Assume that the initial price of energy and the number of kilowatt-hours saved are relativelycertain, and that the sensitivity of the BCR is being tested with respect to the following three values of energy price change: a lowrate of en
42、ergy price escalation (slowly increasing benefits from energy savings); a moderate rate of escalation (moderatelyincreasing benefits); and a high rate of escalation (rapidly increasing benefits). These three assumed values of energy price changemight correspond to our projections of pessimistic, exp
43、ected, and optimistic values. Three BCR estimates result from repeating theBCR computation for each of the three energy price escalation rates. For example, BCRs of 0.8, 2.0, and 4.0 might result. Whereasa deterministic approach might have generated a BCR estimate of 2.0, now it is apparent that the
44、 BCR could be significantly lessthan 2.0, and even less than 1.0. Thus accepting the time clock could lead to an inefficient outcome.7.3.4 There are several advantages of sensitivity analysis. First, it shows how significant a single input variable is in determiningproject outcomes. Second, it recog
45、nizes the uncertainty associated with the input. Third, it gives information about the range ofoutput variability. And fourth, it does all of these when there is little information, resources, or time to use more sophisticatedtechniques.7.3.5 Disadvantages of sensitivity analysis in evaluating risk
46、are that it gives no explicit probabilistic measure of risk exposureand it includes no explicit treatment of risk attitude. The findings of sensitivity analysis are ambiguous. How likely is a pessimisticor expected or optimistic value, for example, and how likely is the corresponding outcome value?
47、Sensitivity analysis can in factbe misleading if all pessimistic assumptions or all optimistic assumptions are combined in calculating economic measures. Suchcombinations of inputs are unlikely in the real world.7.3.6 Sensitivity results can be presented in text, tables, or graphs. One type of graph
48、 that is useful in showing the sensitivityof project worth to a critical variable is illustrated in Fig. 1. Net benefits (NB) for Projects A and B decrease as the discount rateincreases. The slopes of the functions show that NB is more sensitive to discount rate changes for Project A than for Projec
49、t B,assuming other variables remain unchanged. These functions also help in making comparisons as to which project is more costeffective.At a discount rate below 7 %, for example, ProjectAhas the greater NB.At a rate above 7 %, Project B yields the greaterNB. And at 7 %, the two projects provide identical NB.7.3.7 Note that the functions indicate the potential values of NB if different values of the discount rate occur. If decision makershave some idea as to the likelihood of specific discount rates, the graph will help them evaluate the NB implications for these twoproj
